For several months the euro/U.S. dollar has been trading within a large sideways range, with well defined resistance around $1.29- $1.30 and support around $1.2450. Growth forecasts have brightened for the Eurozone this year, and additional rate hikes by the European Central Bank (ECB) are on the horizon, but market watchers are wary about forecasting a strong upside breakout for the euro. Some currency analysts say the euro may remain stuck in the doldrums between now and year end.
“The short-term outlook for the euro is really a dollar story,” says Paul Guest, senior European economist at Moody’s Economy.com. “The outlook for the ECB is quite established. In contrast, the outlook for the Fed is less clear, making the dollar gyrate on the latest data.”
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